Area workers feel pinch as pay stagnates

With the recession raging and good-paying factory jobs vanishing at a disturbing pace, the average wage and salary per job in the Buffalo Niagara region grew by a scant 0.6 percent during 2009, according to new federal data.

That was the smallest increase in at least 11 years and the fourth year in a row that the pace of wage and salary growth has slowed in the region, according to data recently released by the U.S. Bureau of Economic Analysis.

Even more painful for workers, the tiny growth in wages and salaries, which inched up to an average of $39,491 per job from $39,265 in 2008, didn't come close to keeping pace with the2.7 percent jump in consumer prices.

In other words, the purchasing power of the average local paycheck actually declined in 2009.

Ouch.

George Palumbo, a Canisius College economist, attributed the weak growth to the stumbling economy and the especially painful blow it has delivered to local manufacturers. The continued battering of the local factories, which has cost the region one of every six manufacturing jobs over the last two years, really hurts because those positions tend to pay better than most.

Still, in a glimmer of good news, our paltry raises were better than the average for the country as a whole, which grew by an almost imperceptible 0.05 percent in 2009.

That's little solace to local workers, who have been forced to scrimp more than ever because their paychecks don't buy as much as they once did. The pain is felt not only in local factories. Workers across the region worked fewer hours, absorbed pay cuts or wage freezes, and made other concessions, often to ward off layoffs, as the economy tanked.

The pain was especially acute at the region's factories. Total compensation, which includes wages and salaries, as well as employer contributions to pension and insurance funds, plus government social insurance programs, plunged by more than 12 percent in 2009. That drop was far worse than the

8 percent decline at factories nationally and put total compensation from local manufacturers at its lowest level since at least 1998 -- as far back as the federal data goes -- and likely long before that.

The hit was even harder at the region's durable goods manufacturers, including the local auto plants, which have made deep job cuts over the last decade and where the remaining workers have accepted deep concessions.

Total compensation there plummeted by almost 15 percent in 2009.

Factory compensation likely remained under pressure last year, as manufacturers further reduced their payrolls even after the recession officially ended.

The bright spot locally was the health care and social assistance sector, where overall compensation grew by more than 7 percent, largely because of an aging population, Palumbo said.

Compensation growth also was strong in management positions, topping 15 percent. Overall compensation for real estate, professional, scientific and technical services jobs, as well as positions in the accommodation and food services sectors also grew faster than the local average, as did the biggest segment of the local job market -- government.

Still, local wages and salaries remain well below the national average of $45,831 -- and the gap is widening, which is bad news for the region because it means less money to boost the area's economy. The gap, which was about

12 percent in 2001, now tops 16 percent.

"We're falling behind the national average," Palumbo said. "The gap is there. The gap is growing."

e-mail: drobinson@buffnews.com

David Robinson – David Robinson is the deputy business editor for The News, where has worked since graduating from Syracuse University in 1985. A New Hampshire native, he started out in the News' Tonawanda bureau and moved into the business news department in October 1987, exactly a week after the stock market crash.